March 6, 2020 – Employers added 273,000 jobs last month as the U.S. unemployment rate dropped to 3.5 percent matching a 50-year low, according to the most recent U.S. Bureau of Labor Statistics report. Economists polled by MarketWatch forecast a 165,000 increase. The February gain is the 113th consecutive month of job growth. The number of unemployed currently stands at 5.8 million.
U.S. economic performance, however, continues to be threatened by the coronavirus outbreak. “As sound and reaffirming as the economy appears in this month’s jobs report, we have to be mindful that it does not capture any material impact from the coronavirus outbreak that we’re just beginning to experience in communities around the country,” said Scott A. Scanlon, CEO of Greenwich-based Hunt Scanlon Media. “It will take one, two or even three more monthly job reports before the full extent of the crisis can be fully weighed and evaluated against economic activity.”
Everyone is watchful. “If we start to handle things the way they’re handled in Italy and South Korea, closing schools and having mandated cancellations of travel and sporting events, I think there’s no way we don’t start to see it in the labor market and in consumer confidence and spending,” Liz Ann Sonders, chief investment strategist at Charles Schwab, told CNBC.
Where Job Growth Occurred
In February, notable job gains occurred in healthcare and social assistance, food services and drinking places, government, construction, professional and technical services, and financial activities.
- Employment in healthcare and social assistance increased by 57,000 in February. Healthcare added 32,000 jobs, with gains in offices of physicians (+10,000), home healthcare services (+10,000), and hospitals (+8,000). Employment in social assistance increased by 25,000, with a majority of the gain in individual and family services (+18,000). Over the past 12 months, employment increased by 368,000 in healthcare and by 191,000 in social assistance.
- Food services and drinking places added 53,000 jobs in February. Employment in the industry has increased by 252,000 over the past seven months, following a lull in job growth earlier in 2019.
- In February, government employment increased by 45,000, led by a gain in state government education (+16,000). Federal employment increased by 8,000, reflecting the hiring of 7,000 temporary workers for the 2020 Census.
- Construction added 42,000 jobs in February, following a similar gain in January (+49,000). In 2019, job gains averaged 13,000 per month. In February, employment gains occurred in specialty trade contractors (+26,000) and residential building (+10,000).
- In February, employment in professional and technical services increased by 32,000. Job growth occurred in architectural and engineering services (+10,000) and in scientific research and development services (+5,000). Employment continued to trend up in computer systems design and related services (+8,000). Over the past 12 months, professional and technical services has added 285,000 jobs.
- Employment in financial activities increased by 26,000 in February, with gains in real estate (+8,000) and in credit intermediation and related activities (+6,000). Over the past 12 months, financial activities has added 160,000 jobs.
- Employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, and information, changed little over the month.
Hiring in 2020
U.S. employers expect the hiring pace to remain steady into the first 90 days of 2020 though regional and industry forecasts are mixed, according to the latest “Employment Outlook Survey,” released by ManpowerGroup. Employers in all U.S. regions and industry sectors said they were expecting headcount to grow. This is the eighth consecutive year of double-digit hiring outlooks in the U.S., according to the survey of more than 11,500 U.S. employers.
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Expectations for 2020 are largely positive but are more modest than in years past, according to Bullhorn’s “Global Recruitment Insights and Data” report. This is likely connected to economic uncertainty with 45 percent expecting a recession in 2020, compared to just 30 percent heading into last year, said the study. Overall, 64 percent of respondents named economic uncertainty as their top macroeconomic challenge for the coming year, up from 49 percent last year.
“Continued concerns over trade uncertainty are leading to some uneven market conditions in the U.S., yet the overall labor market looks resilient heading into the new year,” said Becky Frankiewicz, president of ManpowerGroup North America. “With seven million jobs open for 11 straight months and ongoing positive hiring intentions across all industries, employers need to work harder to match people to the right roles.”
“Companies that want to hire and retain the best talent, should hire for learnability and help people develop new skills for emerging roles,” she said. “Our economic prosperity depends on helping people adapt their skills so companies can compete in a talent scarce economy.”
ManpowerGroup interviewed over 58,000 employers in 43 countries and territories to forecast labor market activity in the first quarter of 2020. All participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of March 2020 as compared to the current quarter?” In the ManpowerGroup research for the first quarter of 2020, employers in 42 of 43 countries and territories surveyed said they expect to grow payrolls in the period up to the end of March 2020.
When compared with the previous quarter, hiring plans strengthen in 15 of the 43 countries and territories, while employers in 23 reported weaker hiring prospects, with no change reported in five. In a comparison with last year at this time, employers in 12 countries and territories reported stronger hiring sentiments, while hiring intentions weakened in 26 and were unchanged in five. The strongest labor markets were anticipated in Greece, Japan, Taiwan, the U.S. and Romania, while the weakest hiring activity was expected in Panama, Argentina, Costa Rica, Italy and Spain.
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Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media